Cost, cycle time, and response. It’s interesting that these three topics are always brought up, and always in this order, when we ask our clients what keeps them up at night. We would expect them to be listed in the reverse order. Here’s how it usually breaks down for marketers:
- Without fail, we find that perceptions of direct mail costs are due to a higher cost per account (CPA) and there is always a push on all fronts to lower it.
- Time to market is another common concern. We frequently hear that for every day we take out of the execution cycle, we can significantly impact campaign success, usually driven by higher response and conversion rates due to the freshness of data.
- Finally, there is the focus on response. While it’s always third on clients’ lists, we know it’s first in their hearts. Strong response can cover inefficiency in a direct marketing program, but as packages fatigue and CPA rises, there is a push to reduce direct mail costs and improve cycle times.
Disciplined direct marketers know that you have to focus on all three, every day. Never rest, never ever rest. I frequently talk about improving response, so today I want to focus on how we reduce cost and cycle time for our clients.
Postal Strategies Drive a Significant Reduction in Direct Mail Cost
Postage is typically two to three times the cost of manufacturing the mailpiece. This is why IWCO Direct focuses so strongly on postal optimization. We are evaluated every month on our postal efficiency, and this focus has helped us deliver 10 to 20% savings on postal spend. Think about that: we have clients who mail 20 million packages a month that are now seeing average postage savings of $.04/per piece. That’s $800,000 per month, or nearly $9,000,000 per year! This was not a single solution, but many tools that we employed to achieve these postage numbers: Commingling, Regional Commingling, Walk Sequence Targeting, Campaign Aggregation, Dynamic Content Management, Variable Inserting, and many more.
Data Analysis & Content Management Solutions are the Keys to Improving Cycle-Time
The best part about postal efficiency is that we are entering mail deeper into the postal network and doing much of the work the Postal Service would have to do to get the mail ready for delivery. This is also a huge time savings—two to four days for Marketing Mail. But there are several other ways we shorten critical path cycle-time.
It starts with data. What is your cycle-time from ordering your list to the last day of an in-home window? For about 90% of the direct marketing universe, it is 61 days or longer. How much does your target universe change in 61 days? It’s no wonder response rates are typically well below 1%. We can do better—much better.
For one client, we partnered with their in-house data team, our data team, and our Operations team to develop a 21-day cycle, from the initial list order to last day of in-home—a 40-day improvement! This was no small task and required some significant coordination to develop the concurrent paths needed to properly execute, but we have the road map, and we can take you there!
Approaching Direct Mail Automation with Dynamic Content In Mind
Direct mail automation is a misnomer. I can’t automate the entire direct mail process. However, I can add automation to several critical path processes that can reduce cycle-time. The most impactful of these areas is in content management. Again, 90% of the direct mail marketer universe starts each campaign with a kick-off meeting and ends 90 days later with delivery to the USPS. There is an amazing amount of time, passion, creativity, innovation, and hard work to get a campaign to market. However, it takes the same amount of time to kick off a new campaign from scratch as it does one that is going to mail every month.
IWCO Direct 1to1℠, our Dynamic Content Management solution, supports your marketing team by building large content databases and robust decision engines to automate this process. This allows us to spend more time developing and refining content rather than the cumbersome process of moving it through your organization and ours. Building a dynamic content environment can eliminate days on your side and ours while allowing for infinite segmentation.
Production automation is another important consideration. At IWCO Direct we call it “burst strength”: What can we do to produce the greatest volume of mail in the shortest amount of time? We ask ourselves this question every day. One of the ways our Operations team answers that question is to conduct a variety of Kaizens focused on improving productivity by improving machine run speeds and extending uptime. We also invest $15,000,000 a year in new and upgraded equipment. Continuous feed digital color, high speed bindery equipment, variable inserters, front- and back-end automation tools, and plant reflow are just a few of their projects for this year! Come visit any of our campuses in Minnesota or Pennsylvania and the fruit of our teams’ hard work is clearly visible.
Our clients are operating in a dynamic, hyper-competitive environment. If they weren’t, there would be no need for a direct channel, let alone a direct mail channel. We understand the challenges you face and why direct mail costs and cycle times keep you up at night. We will never relax our efforts to improve your results. Contact me here to talk about how our road map can support your customer journey and help you sleep better along the way.
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